The Rise in Lifetime Earnings Inequality Among Men
Stephanie Aaronson 2002-21

Abstract:&nbspRecent trends in lifetime earnings inequality in the United States
have been barely explored, despite the fact that lifetime earnings are
a better measure of access to resources than the more widely studied
annual earnings. This paper demonstrates that lifetime earnings
inequality has increased over the past 30 years. We first explore how
starting wages and wage growth have changed over time and link the
changes to trends in lifetime earnings and the lifetime skill-premium.
We then calculated a broader measure of lifetime earnings inequality
and show that since the late 1960s, lifetime earnings inequality has
increased by a third. Between the late 1960s and mid-1970s a rise in
within-education-group inequality more than accounts for the increase;
since then the growth in between-education-group inequality accounted
for a majority of the rise. These results are consonant with the data
on starting wages and wage growth. Finally, we show that the increase
in inequality has been largely driven by greater dispersion in hourly
wages, although declining hours of work among low-education young men
did play a role. The analysis uses data from the March Current
Population Survey as well as matched CPS data. Thus we demonstrate how
repeated cross-sections and short panels of data can be used to
examine issues usually reserved for long panels.